At Me Chin Att Bundle

Barbara Bryant
• 30 vet Asia/Pacific • Former Director Hong

• Co-Founder – Kong Tourism-LA
boutique rep firm of • Establish HK Film Dpt
Bryant & Tripptree • VP Sales/Marketing
• Firm appointed, PATA Mandarin Oriental
Regional Director Hotels
ATME EXECUTIVE CHINA THINK TANK
Barbara Bryant, PATA North America Regional

Director
Slide: 3 February 12-13, 2009

Ron Erdmann
Deputy Director
Office of Travel & Tourism Industries
Ron Erdmann
• Admin international travel • Prior nearly decade with
research U. S. Travel & Tourism
• Consults with clients on Admin until closed
use and application of • Experienced in
information developing and promoting
• Role is to create and rural tourism
improve upon
international marketing
intelligence
China Research
Presented to:
ATME:
Think Tank
Presented by:
Ron Erdmann
Office of Travel and Tourism Industries
International Trade Administration
U.S. Department of Commerce
February 2009
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009) 6
OTTI Resources on China
• Visitor volume to U.S. from China (monthly from I-94 form)

• U.S. resident travel to China (non-stop) (monthly)
• Other Data collected on DHS I-94 form (monthly—port, visa type, age of travelers,
address in U.S., etc.)
• Visitor volume forecast (semi-annual)
• Visitor spending (annual)

• Visitor profile (annual)
• U.S. resident travel to China (annual)
• Chinese visitation to all countries (annual)
• China Outbound Study (one-time special study)

• China Travel Trade Barometer (quarterly planned)
The China Outbound Travel Market
China Outbound Travel
Total Outbound Travel 40,891.4 10,000

40,000 Total Long-haul Travel
8,000
30,000
25,330.9
6,000
4,808.4
20,000
4,000
3,151.4
11,174.0
10,000
5,643.2 2,000
1,834.7
1,216.2
0 0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007p 2008f 2009f 2010f 2011f
Data from China National Tourism Office and Global Insight – Global Travel Navigator May 2008
China Outbound Trends
(total outbound travelers)
Destination 2001 2002 2003 2004 2005 2006 2007f 2008f 2009f 2010f 2011f 06/01 11/06 11/01
GRAND TOTAL 11,170 15,097 15,711 21,536 22,753 25,120 28,299 31,585 34,775 38,183 41,789 13,949 16,670 30,619
Asia 9,346 12,695 13,521 18,914 19,920 22,066 24,986 27,929 30,784 33,816 37,019 12,720 14,953 27,673
Europe 1,398 1,963 1,831 2,164 2,270 2,387 2,588 2,850 3,108 3,395 3,717 989 1,330 2,319
North America 319 322 234 304 387 465 508 568 625 690 745 146 280 426
Middle East 35 46 54 73 92 117 126 140 156 173 193 82 76 158
Latin America 32 33 32 41 43 44 49 54 59 64 70 12 25 37
Africa 33 33 33 33 33 33 33 33 33 33 33 0 0 0
Caribbean 7 6 6 7 7 8 9 10 11 12 13 0 5 6
Hong Kong 4,449 6,825 8,467 11,886 12,730 13,761 15,639 17,544 19,386 21,324 23,349 9,313 9,588 18,900
Macao 1,309 1,726 1,431 2,191 2,370 2,627 2,986 3,350 3,701 4,071 4,458 1,319 1,831 3,149
Singapore 460 666 560 880 858 1,037 1,189 1,322 1,449 1,585 1,727 577 690 1,267
Thailand 801 798 607 779 762 914 993 1,104 1,222 1,361 1,524 113 610 723
Korea, Republic 482 539 513 627 710 897 1,019 1,113 1,202 1,298 1,402 415 505 920
Japan 391 452 449 616 653 812 906 998 1,089 1,187 1,295 421 484 904
Vietnam 625 660 693 778 753 791 883 982 1,078 1,183 1,295 166 504 670
Italy 394 531 480 728 725 758 815 897 977 1,063 1,157 365 399 763
Russia 461 725 680 661 691 722 791 871 953 1,050 1,164 261 442 703
Malaysia 453 558 351 550 352 439 504 560 614 671 732 -14 292 279
Germany 237 270 268 293 313 327 358 395 430 468 509 90 181 272
United States 232 226 157 203 270 320 353 394 433 479 516 88 195 283
Australia 158 190 176 251 285 309 344 376 407 441 478 150 170 320
Canada 87 96 76 102 117 145 155 174 192 210 229 58 84 142
Sw itzerland 49 69 63 100 137 144 154 170 185 201 219 94 75 170
Indonesia 32 37 41 51 112 117 134 149 164 179 195 85 78 163
Belgium 62 113 107 114 109 114 122 134 146 159 173 52 60 111
Netherlands 81 82 78 82 97 113 121 134 146 158 172 32 59 92
United Kingdom 58 64 68 95 92 99 109 120 131 142 155 41 56 97
Data from China National Tourism Office and Global Insight – Global Travel Navigator May 2008
U.S. Market Share of Long-haul Travel
U.S. Market Share of Long-haul Travel
U.S. % share of long-haul Long-haul % share of outbound

22%
21%
18% 18%
16% 16%
14% 12% 13%
17% 12% 12% 12% 12% 12% 12%
16%
14%
13% 13%
12% 12% 12% 12% 12%
9% 9% 10%
7% 8%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007p 2008f 2009f 2010f 2011f
What is Known about China Outbound Travel?
Total Outbound
• 25 million in 2006
• Only 12% to long-haul destinations; 70% to Hong Kong/Macau/Singapore.
• Strong growth across most top 20 destinations, especially Hong Kong,
Macau, Korea, Italy, Australia.
• Tripling of travelers to Hong Kong from 2001-2006 (4.5M to 14M)
• Top long-haul destinations in 2006: Italy (807K), Russia (720K), Germany
(442K), US (321K), & Australia (309K).
• Total travel to all long-haul destinations was 3.2 million in 2006, forecast
to grow to 4.8 million by 2011.
Sources: Global Insights Inc. Global Travel Navigator; OTTI, UNWTO
Chinese Visitors to the U.S.
000s of visitors
16th
China Spending in the U.S.
Millions of Dollars
10th
$2,699
$3,000
$2,500
$2,071
$2,000
$1,534
$1,424
$1,500 $1,243 $1,291 $1,326
$1,185 $1,115
$907 $947 $858
$1,000
$500 $335 $378 $424
$0
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
What is Known about China Outbound Travel
to the U.S.?
• Outbound to the U.S.:
– 397,000 visitors to the U.S. in 2007—near doubling in six years.
– Flat visitor volume from 1993 to 2003.
– 25% growth through November 2008, but slowing considerably.
• U.S. share of Chinese outbound travel has declined for two

reasons:
– Long-haul travel has declined as a share of total outbound
– U.S. share of long-haul had declined until four years ago. Share of long-haul
has increased.
Sources: Office of Travel & Tourism Industries (OTTI) & Global Insights Inc. Global Travel Navigator
to the U.S.?
• Trip Characteristics:
– Port of Entry: San Francisco (21%), Chicago (17%), LA (17%), NYC (10%).
– Destinations: concentrated in a few states (CA-57%, NY-32%, followed by: NV,
DC, IL)
– Main Purpose of Trip: Business -51%; Visiting Friends & Relatives (VFR) - 23%;
Convention - 11%; & Leisure/vacation 9%.
– Accommodations: 83% stay in hotels.
– Stay length: mean average of 28 nights, but is influenced by a few staying for
a very long period of time. Median is 11 nights.
– Activities: Chinese are less active travelers than average travelers.
• OTTI tracks 25 Activities
• Top activities 2007: Shopping (88%), Dining in Restaurants (80%), Sightseeing in Cities (51%), Visit
Historical Places (47%), Visit National Parks (29%), Visit Amusement/theme parks (28%) …..
Source: OTTI , Survey of International Air Travelers, 2007.
to the U.S.?
• Trip Characteristics (continued):
– Gender: 70% male. Female proportion is increasing.
– Age: Males—41 mean / 39 median; Females—36 mean / 35 median.
– Income: lower than most origin countries.
• $63,900 (mean)
• $36,700 (median)
– Spending: highest spending per traveler of any country ($5,200 at destinations,
i.e., excluding airfares). High spending relative to income may reflect saving
for “dream vacation” and souvenir purchases made on behalf of
friends/relatives.
– Looking ahead:
• Trip characteristics will likely change if group leisure increases.
Source: OTTI , Survey of International Air Travelers, 2007.
U.S. China MOU on Group Leisure Travel
• Under to U.S. law Chinese can visit so long as they receive a visa.
• Under Chinese law, Chinese travel agencies can only sell
packaged leisure tours to Chinese to countries with whom they
have a bilateral agreement or ADS
• In December 2007 U.S. China Tourism MOU Signed
• MOU implemented in 2 phases
– Phase 1: July 2008 covers 9 provinces (over 70 % of the market)
– Phase 2: U.S. is ready to implement when China agrees
U.S. China MOU on Group Leisure Travel
Key Provisions
• China National Tourism Administration (CNTA) authorized
travel agencies may work with tour operators who are
vetted by associations with programs approved by CNTA
• U.S. travel destinations able to market their brand in
China
• To date NTA is the only U.S. association with a program
• In China the Government sets and monitors standards
• In the US the industry sets and monitors standards.
Supply Side Considerations
• Liberalized restricted agreement (no open skies)

• Non-stop current cap of 10 flights/day per “side”
– U.S. at cap (based on January non-stop OAG schedule.
– China at half the cap level.
– Thus, based on current caps, short-term growth in non-stop flights
must come from Chinese carriers. Long-term growth must come from
upward-adjusted caps.
– 57% of all traffic between China and U.S. (inbound+outbound) is non-
stop. Non-stop is growing as a share of all traffic.
Who’s Flying Whom?
• Traffic Mix:
– US Flag = 58%, & Foreign Flag = 42% of total air traffic
– 62% U.S. Citizens vs. 38% Non-Citizens
• Chinese to the U.S.:

– 40% fly foreign flag carriers
– 60% of U.S. carriers
• Americans to China:
– 57% fly U.S. carriers
– 43% of foreign flag carriers
China Outbound Travel Study
• Purpose: to develop a fuller understanding of the China outbound travel

market in support of increasing tourism exports to the U.S.
• Collaboration among:
– Alfred P. Sloan Foundation, Travel & Tourism Industry Center, University South Carolina
– U.S. Department of Commerce, Office of Travel & Tourism Industries (OTT)
– U.S. Travel Association
– Over 20 U.S. destination and travel-industry partners
• Multi-phase comprehensive project:

– Qualitative and quantitative components
– Methods: Telephone / focus-group / in-depth interviews
– Surveys of long-haul travelers, U.S. visitors, Chinese government officials, Chinese travel
trade
– Focuses on Chinese long-haul travelers outside of Asia
China Outbound Travel Study Phases and Elements
telephone survey Secondary Source Review

Phase 1 in 11 Chinese cities (Demographics,
(n= 7,000) Economics, Politics)
11 customer focus travel trade government

Phase 2 groups in 11 Chinese interviews official interviews
cities (n=8/session) (n=30) (n=20)
phone interviews in-person customer

Phase 3 in China interviews in the U.S.
(n=1600) (n=400)
Phase I Telephone Survey
Methodology
• Purpose: gain better understanding of Chinese long-haul travel

market
– Potential of U.S. destinations and businesses
– Chinese views of the U.S.
• Focus: on Chinese who…

– Have traveled outside of China
– Are at least somewhat likely to travel outside of China
– Are at least somewhat likely to/interested in visiting the United States
• Method:
– Telephone interview
– 7000 randomly selected Chinese adults, ages 18 and older from 11 urban areas
– 3 “tier 1” cities; 8 “tier 2 cities” accounting for virtually all outbound travel
Cities Surveyed
3 Tier 1; 8 Tier II
Outbound Travel
• Low outbound travel incidence

– 8% 1+ leisure trips outside mainland China past 3 years
– 10% 1+ leisure trips outside Asia past 3 years
– 21% are “at least somewhat” likely to travel outside of Asia in the next two years
• Most travel to nearby Asian countries

– U.S. top non-Asian country (9%)
– Most visitations connected to Landmark/Sightseeing cities and cities with China towns
Possible future travel
• 21% of Chinese “at least” somewhat likely to travel outside of China in

next two years
– Most likely destinations are Asian
– France ranked third (12%)
– America ranked sixth (10%)
• 35% are “at least somewhat” Interested in traveling to America

– A significant amount would like to but are unlikely to travel to America
• When asked to pick one dream destination

– America was number one
– Only two Asian countries made top ten
– Difference between desire and perception of possible or likely
Chinese attitudes
• America is…
– Dominant; Exciting; Successful
• America isn’t
– Friendly; Safe; Familiar
• Want to come to America to…
– Learning and Discovery
– Experiencing a different culture
– Seeing something new and different
• Interests
– Seeing and experiencing something new and different important to Chinese tourist
– Sightseeing cities, landmarks, and tourist attractions scored high
– Rest and relaxation--scored moderately high.
– Interest in traditional vacations to resorts & beaches was low. Chinese tourist has a different ideas on
rest & relaxation or how to facilitate it
Dream Destinations
The United States is the most frequently cited dream destination
for Chinese citizens, followed by France.
“ Europe has a deep cultural “The statue of Liberty is so famous as

background and is full of historical (n=7,000)
a national symbol – I would be eager
attractions. In addition, each to see it. The USA’s advanced
United States 13%
historical attraction has its own style economy is another attraction for me,
and this enables each different country as I want to experience this in-
France 10%
in Europe to present a different person.“
culture.” Traveler, Xian
Australia 7%
Traveler, Chongqing
Japan 5% “Hollywood in LA and Disneyland –
“You can go to see the glaciers and such modern developments attract me
national parks in Canada – such United Kingdom 4% to the U.S. very much.”
natural sceneries are the most famous Traveler, Wuhan
attractions of Canada.” Canada 4%
Traveler, Wuhan
Singapore 4%
Activity Importance vs. U.S. Perception
44%
Historic/Heritage sites
35%
38%
Beach/Waterfront
34%
37% “The performance by the native

City sightseeing
34% Hawaiians was fantastic – it gave
history and drama to us tourists.”
Traveler, Guangzhou
31%
National parks
32%
“The buildings’ architecture in
New York was unique – every
31% building had its own design and
Art galleries/Museums
27% structure.”
Traveler, Wuhan
Small 31%
towns/Countryside 28% “The most impressive sight I saw
is the Grand Canyon – it is really
Extremely Important (5) a miracle.”
U.S. Offers a lot (5) 28% Traveler, Shenzhen
Chinese communities
28%
Phase II Focus Groups
Methodology
• Purpose: Qualitative assessment of…

– views of the U.S. as a country and leisure destination
– competing destinations
– destination choice process
– marketing insights for U.S. business and destinations to promote travel exports
• Method:
– 8 participants per group
• 4 previous leisure travelers to the U.S. (or business trip with leisure component) in
past 3 years
• 4 previous leisure travelers to other long-haul destinations (or business trip with
leisure component) in past 3 years
– One focus group in each of same 11 tier 1 and tier 2 cities from Phase I phone survey
Common Themes
• Desire and affinity to experience the outdoors and natural wonders

• Taking lots of pictures/ having ample time at sightseeing locations to take
lots of pictures
• Fear of violence in America/ wide spread gun owner ship
• The need to have mandarin translations/ uncomfortable with not knowing
what is said or is going on
• The feeling that Americans are nice but do not respect them or believe
they have money to spend and make our hospitality worth while
• Mandarin Hotline to contact incase of emergency
China Study Phase III
Traveler Segments
• USA Focus
Have visited the U.S. - 400 in person Interviews
• China Traveler Market

Phone Interviews with 1,600 Identified Chinese Travelers
– Outside Asia
Have traveled outside of Asia, but have not visited the U.S.
– Within Asia
Have not traveled outside of Asia, but plan to (but not U.S.)
– Potential
Have not traveled outside of Asia, but plan to (including the U.S.)
China Study Phase III
Focus of Questions
• Images of the U.S. as a Leisure Travel Destination

• Atmosphere or Mood of US Expected to Experience
• Distinctive Tourist Cities & States in U.S.
• Distinctive Tourist Attractions in the U.S.
• Activity Participation & Comparison of US to others
• Factors when deciding on a leisure destination, with
comparisons of the US to other destinations
• Use of Media & MORE…………………….
Some Additional Sources of Information on China
• USTravel – China Study Phases I – III, see US Travel Website

• U.S. Department of Commerce
• Office of Travel & Tourism Industries – www.tinet.ita.doc.gov
– Monthly Arrival Figures
– Monthly Air Traffic Data to and from China
– Annual Survey of Chinese Travelers to US & U.S. to China
– Inbound Forecasts (2 per year) & Annual Spending Estimates
• U.S. Commercial Service Offices in China
– See Website - http://trade.gov/cs/
– Also Offering China Webinar February 18th - See OTTI TInews
Heather Hardwick
Vice President
Menlo Consulting
Heather Hardwick
• Specialty is marketing • Frequent speaker
analysis, strategic
planning, branding and
product development
• Strong expertise in
educational travel,
adventure travel, group
travel and cruising
Examining the Outbound Travel
Market from China
Heather Hardwick
Vice President
Menlo Consulting Group
February 12, 2009
MENLO CONSULTING GROUP, INC.

China Market Overview
Most populous country in the
world
World’s fourth largest economy
World’s third largest country by
area
Key cities and gateways include
Beijing (15M), Shanghai (17.5M)
and Guangzhou (10M)
World’s #1 Internet users and
mobile communications users

Most populous nation and growing
Population of China
1,400 1,360
1,307
1,300 1,263
Persons (Millions)
1,200
1,200
1,134
1,100
981
1,000
900
1980 1990 1995 2000 2006 2010p
Source: World Bank World Development Indicators; Chinese State Population and Family Planning Commission

China’s Growing Middle Class
Number of Chinese Households in Middle Class
150
Lower Middle Class
(HHI ~USD 3K-5K)
125
Households (Millions)
100
75
Upper Middle Class
50 (HHI ~USD 5K-12.5K)
25
0
2005 2007 2009 2011 2015
Source: McKinsey Quarterly

GDP is expected to continue to grow,
albeit at a somewhat slower rate
Actual and Projected China GDP Growth Rates
Year over Year Growth Rates (%)
12% 11.4%
10.4% 11.1%
10.1%
10% 9.1%
8.6%
8% 8.5%
8.2%
7.2%
6% 6.0%
4%
2%
0%
2004 2005 2006 2007 2008p 2009p 2010p 2011p 2012p 2013p
Sources: China National Bureau of Statistics; The Economist

Chinese outbound travel is booming
Outbound travel from China and Hong Kong
41.0
40
34.5
Persons (millions)
31.0
28.9
30
20.2
20 16.6
12.1
9.2 10.5
10 8.4
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: CNTA, compiled by Pacific Asia Travel Association (PATA)

Double digit growth has become the norm
Growth rates in outbound travel from China and Hong Kong
50%
42.8%
Year over Year % Change
40% 36.8%
30%
18.6%
20% 15.9% 21.7%
10% 7.5% 11.3% 12.3%
0%
2001 2002 2003 2004 2005 2006 2007 2008
Sources: CNTA, PATA

China’s growing travel spending
International Tourism Expenditures
30 29.8
24.3
21.8
19.1
USD (Billions)
20
15.4 15.2
13.1 13.9
10
0
2000 2001 2002 2003 2004 2005 2006 2007
Sources: UNWTO, China State Foreign Exchange Administration

Most outbound travel is within Asia
Top Asia Pacific destinations for travelers from China

1,200,000
1,000,000
Singapore
800,000 Vietnam
Travelers
Thailand
600,000 Korea
Japan
400,000
Malaysia
200,000 Australia
USA
0
2004 2006 2007
Source: relevant NTOs, compiled by Pacific Asia Travel Association (PATA)

Chinese travel to North America is
taking off
Arrivals to North America from China PRC
400,000 USA
300,000
Travelers
200,000
Canada
100,000
Source: Pacific Asia Travel Association (PATA)

California has seen substantial
growth from China in recent years
Number of Visitors from China to CA, 1998-2007
(in 000s)
400
300
227
197
200 158
134 149 146
109 120
101
100 71
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: International Trade Administration, Office of Travel and Tourism Industries.

California is making a move in the
market
California opened an office in China in January 2009
All (100%) Chinese view a Chinese Web site as the most
important way for them to learn about California.
Only 1% Chinese consumers and a handful of tour
operators and media reps have been to California.
Almost all Chinese know of Los Angeles and San Francisco.
They also have special ties to China as sister cities to
Guangzhou and Shanghai. One-third recognize San Diego.
Motivations for visiting California include nature/parks,
theme parks, and sunshine
Source: California Travel and Tourism Commission (CTTC)

What drives Chinese tourists to
California?
Events/Activities Consumer Media Tour Operator
Theme Parks 2 1 1
National Parks & World Heritage 1 2 2
Shopping 3 3 4
Entertainment & Nightlife 4 4 6
Art & Culture 2 5 5
Wine & Food 5 6 3
Source: California Travel and Tourism Commission (CTTC)

Outlook for China
Continuing, albeit slowed, economic growth

Growth in outbound travel is expected to continue
Increasing linkages to international destinations and
organizations
Competition for the Chinese traveler intensifying
With the MOU, and increased marketing in China,
the USA stands to benefit from strong inbound traffic

mCG
MENLO CONSULTING GROUP
PALO ALTO, CALIFORNIA

www.menloconsulting.com

Frank Haas
Assistant Dean
University of Hawaii
School of Travel Industry
Management
Frank Haas
• Teaches courses in • Formerly VP Marketing
marketing and Executive Hawaii Tourist Authority
Development in Tourism • $50 million dollar budget
Program
• Undertaken planning
projects for tourism,
government and non-
profit corporations
The Chinese Travel Market:
Open Carefully
Frank Haas
University of Hawai‘i at Mānoa
School of Travel Industry Management
In China …
Everything is possible –
Nothing is easy
In China …
Negotiation starts
After the contract is
signed
Bottom Line
Huge potential … but developing
the potential will take work
Responsible Development
• Hysteria … or irrational exuberance
– 100 million outbound tourists by 2020
– 25 million outbound overnight trips in 2006 … 350%
increase since 1997
• Reality …
– A significant and growing market, but …
– 16.3 million of the 25.3M travelled to Hong Kong or
Macau (64%)
– 392.6 U.S. arrivals in 2007 – projected to 578.5 in
2011 (rank = 20)
Good News: Time for Orderly
Development
Motivation for Hong Kong and
Macau Travel
What We Can Learn from the
Development of the Japan
Market in Hawai‘i
To cover …
• Be prepared for culture shock …
– Learn from experience
• The China market we’ve seen recently
probably isn’t the market post MOA
• Relationships matter
• What we’ve seen with our 56,000 Chinese
visitors
Historical Trends (arrivals)
7,000
6,000
Thousands
5,000
4,000
3,000
2,000
1,000
0
Total Domestic International

International Arrivals Percent
40%
35%
30%
25%
20%
15%
10%
5%
0%
9 51 954 957 960 963 966 969 972 975 978 981 984 987
1 1 1 1 1 1 1 1 1 1 1 1 1
International Arrivals Percent
40%
Early 70s – Hawai‘i
35% Gets Serious
30%
25%
20%
15%
10%
5%
0%
9 51 954 957 960 963 966 969 972 975 978 981 984 987
1 1 1 1 1 1 1 1 1 1 1 1 1
Chinese Arrivals in Hawai‘i
60,000
50,000
40,000
30,000
20,000
10,000
0
989 990 991 992 993 994 995 996 997 998 999 000 001 002 003 004 005 006 007 008
1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2
Chinese Arrivals % of Total
0.9%
0.8%
0.7%
0.6%
0.5%
0.4%
0.3%
0.2%
0.1%
0.0%
9 89 9 91 9 93 9 95 9 97 9 99 0 01 0 03 0 05 0 07
1 1 1 1 1 1 2 2 2 2
Opening a huge new market
means dealing with first time
travelers … and first time
encounters with Western culture
Culture Shock
Problem: Destination Was Focused
on Domestic Visitors
• Limited staff possessing multiple language
skills
– Japanese visitors were dependent on
Japanese speaking guides
– Confusion in accommodations
• Hotel amenities weren’t culturally
appropriate; fixtures were “foreign”
• Lack of appropriate experiences –
especially food
Language Limitations
• Visitors were dependent on their guides
• Guides were often driven by commission
• Result: visitors didn’t always get an ideal
experience … and satisfaction suffered
• Guided tours caused large groups to visit
attractions, restaurants, etc. en masse,
overwhelming capacity
Confusion in Accommodations
• As the Japan market developed, first time
visitors encountered strange/unexpected
features and fixtures …
– How to work the plumbing?? Electrical
appliances?? Call the front desk and no one
speaks Japanese
– No green tea/teapots in the room
– No drains in the bathroom floor
Lack of Appropriate Experiences
• Japanese were consumers of mass
tourism as westerners were becoming
more independent
• Japanese wanted quality Japanese food
… breakfast, lunch and dinner
• No tipping
Cultural Differences
• Visitors carried large amounts of cash …
vulnerable to robberies and purse
snatchings
• Prevalence of smoking
• Golf
What we were selling …
The Retail Experience
What they wanted to buy …

Solutions Came with Critical
Mass
The French Festival
Chinese visitors … so far … have
not mimicked the early Japan
visitor
Because of lack of Approved
Destination Status and entry
restrictions …
Chinese visitors to date
have been senior
government and business
officials
Visitor Spending
$US Per Person Per Day
US West $155.90
US East $192.80
Japan $268.80
China $377.20
Some Emerging Issues
(2003 Hawai‘i Post Arrival Survey)
• Chinese food (especially good Chinese

food) is a driver of satisfaction
• Language barriers were linked to
perceived cultural discrimination
• Negatives …
– Service quality (knowledgeable in Chinese
service expectations)
– Time constraints (guides pushing too many
activities)
If Chinese tourism booms …
there will be a change in
character as class goes to mass
What We Think We’ll See
• Shopping will include “authentic” luxury items …
and …
• Gifts and souvenirs for family and friends at
home … and
• Vitamins, supplements and other “safe” products
• Chinatowns and China connections are a draw
• Need for acceptance of Chinese credit (China
Union Pay)
• More Chinese speaking staff … through
training or new hires
– HTA contract with the Community College
system
• Developing retail, food and beverage and
hotel amenities that appeal to the Chinese
• Learn to manage diverse cultures in the
visitor mix
• Political events pose a risk
• Over time, we’ll see the market evolve
from GIT PITFIT
– The market to Hawai‘i is about 30% FIT at the
moment, but that will change with volume
• Satisfaction may be sub-par until language
and product are aligned … feeling of
cultural discrimination
• Prepare for cultural differences – i.e.
tipping, smoking, group mentality
Relationships Count
Titles and Official Status

Matter
Understand that we have
competition … regional Asian
travel
Mahalo … Arigato … Xie Xie
谢谢

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Barbara Bryant

• 30 vet Asia/Pacific • Former Director Hong

Barbara Bryant, PATA North America Regional

Slide: 3 February 12-13, 2009

• Visitor volume to U.S. from China (monthly from I-94 form)

• Visitor volume forecast (semi-annual)

• Visitor spending (annual)

• China Outbound Study (one-time special study)

Total Outbound Travel 40,891.4 10,000

U.S. Market Share of Long-haul Travel

U.S. % share of long-haul Long-haul % share of outbound

Sources: Global Insights Inc. Global Travel Navigator; OTTI, UNWTO

$500 $335 $378 $424

• U.S. share of Chinese outbound travel has declined for two

Source: OTTI , Survey of International Air Travelers, 2007.

• Liberalized restricted agreement (no open skies)

• Chinese to the U.S.:

• Purpose: to develop a fuller understanding of the China outbound travel

• Multi-phase comprehensive project:

telephone survey Secondary Source Review

11 customer focus travel trade government

phone interviews in-person customer

• Purpose: gain better understanding of Chinese long-haul travel

• Focus: on Chinese who…

• Low outbound travel incidence

• Most travel to nearby Asian countries

• 21% of Chinese “at least” somewhat likely to travel outside of China in

• 35% are “at least somewhat” Interested in traveling to America

• When asked to pick one dream destination

“ Europe has a deep cultural “The statue of Liberty is so famous as

37% “The performance by the native

• Purpose: Qualitative assessment of…

• Desire and affinity to experience the outdoors and natural wonders

• China Traveler Market

• Images of the U.S. as a Leisure Travel Destination

• USTravel – China Study Phases I – III, see US Travel Website

MENLO CONSULTING GROUP, INC.

MENLO CONSULTING GROUP, INC.

MENLO CONSULTING GROUP, INC.

MENLO CONSULTING GROUP, INC.

Sources: China National Bureau of Statistics; The Economist

MENLO CONSULTING GROUP, INC.

Outbound travel from China and Hong Kong

Source: CNTA, compiled by Pacific Asia Travel Association (PATA)

MENLO CONSULTING GROUP, INC.

10% 7.5% 11.3% 12.3%

Sources: CNTA, PATA

MENLO CONSULTING GROUP, INC.

Sources: UNWTO, China State Foreign Exchange Administration

MENLO CONSULTING GROUP, INC.

Top Asia Pacific destinations for travelers from China

Source: relevant NTOs, compiled by Pacific Asia Travel Association (PATA)

MENLO CONSULTING GROUP, INC.

Source: Pacific Asia Travel Association (PATA)

MENLO CONSULTING GROUP, INC.

MENLO CONSULTING GROUP, INC.

Source: California Travel and Tourism Commission (CTTC)

MENLO CONSULTING GROUP, INC.

MENLO CONSULTING GROUP, INC.

Continuing, albeit slowed, economic growth

MENLO CONSULTING GROUP, INC.

PALO ALTO, CALIFORNIA

MENLO CONSULTING GROUP, INC.

Total Domestic International